Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Implications for Stock Market - Nadeem_Walayat
2.Odds of Winning Walkers Crisps Spell & Go olidays K, C and D Letters - Sami_Walayat
3.Massive Silver Price Rally During The Coming US Dollar Collapse - Hubert_Moolman
4.Pope Francis Calls For Worldwide Communist Government - Jeff_Berwick
5.EU Referendum Opinion Polls Neck and Neck Despite Operation Fear, Support BrExit Campaign - Nadeem_Walayat
6.David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - Mike Gleason
7.British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - Nadeem_Walayat
8.Gold Price Possible $200 Rally - Bob_Loukas
9.The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - Michael_Swanson
10.Silver Miners’ Q1’ 2016 Fundamentals - Zeal_LLC
Free Silver
Last 7 days
The Next Systemic Lehman Event - New Scheiss Dollar & Gold Trade Standard - 27th May 16
Energy and Debt Crisis Point to Much Higher Silver, Metals Prices - 27th May 16
Gold Junior Stocks Q1 2016 Fundamentals - 27th May 16
These Crisis Markets Are Primed to Deliver Big Gains, Platinum Never Cheaper! - 27th May 16
Operation Black Vote BrExit Warning for the Wrong EU Referendum - 27th May 16
UK Immigration Crisis Hits New Extreme, Catastrophic ONS Migration Stats Ahead of EU Referendum - 27th May 16
Many of the World’s Best Investors Made Their Fortunes This Way…And You Can Too - 27th May 16
The Ugly Truth About Stock Market Manipulation and Gold Prices - 27th May 16
Gold Price Looking Vulnerable While Gold Stocks Correct - 27th May 16
The 5 Fatal Flaws of Trading - 27th May 16
The Next Big Crash Of The U.S. Economy Is Coming, Here’s Why - 27th May 16
A New Golden Bull or Has the Market Gone Too Far Too Fast? - 27th May 16
It Feels Like Inflation - 26th May 16
Negative Interest Rates Set to Propel the Dow Jones to the Stratosphere? - 26th May 16
S&P Significant Low has Occurred – Not Likely! - 26th May 16
Statistics for Funeral Planning in UK Grave - 26th May 16
Think Beyond Oil And Gold: Interview With Mike 'Mish' Shedlock - 26th May 16
Hard Times and False Mainstream Media Narratives - 26th May 16
Will The Swiss Guarantee 75,000 CHF For Every Family? - 26th May 16
Is There A Stocks Bear Market in Progress? - 26th May 16
Billionaires Are Wrong on Gold - 26th May 16
How NOT to Invest in the Gold Market - 26th May 16
The Black Swan Spotter...Which Saw the Oil-Crash coming; now says the “Invisible Hand” will push Brent to $85 by Christmas - 26th May 16
U.S. Household Debt Still Below 2008 Peak - 25th May 16
Brexit: Wrong Discussion, Wrong People, Wrong Arguments - 25th May 16
SPX is at Strong Resistance - 25th May 16
US Dollar, Back From the Grave? - 25th May 16
Gold : Just the Facts Ma’am - 25th May 16
The Worst Urban Crisis in History Could be Upon Us - 24th May 16
Death Crosses Across The Board Are IRREFUTABLE Stock Market Sell Signals - 24th May 16
Bitcoin Trading Alert: Bitcoin Price Stays below $450 - 24th May 16
Stock Market Crash Death Cross Doom Prevails - 23rd May 16
Did AMAT Chirp? Implications for the Economy and Gold - 23rd May 16
Stocks Extended Their Rebound On Friday - Will They Continue Higher? - 23rd May 16
UK Treasury Propaganda Warns of 3.6% Brexit Recession, the £64 Billion Question? - 23rd May 16
Stock Market Support Breached, But Not Broken! - 23rd May 16
George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers - 22nd May 16
Gold Bull-Phase I Continues to Confound (The Trek to “Known Values”) - 22nd May 16 r
Avoiding a War in Space - 22nd May 16
Will Venezuela Be Forced to Embrace the US Dollar? - 21st May 16
Danish Central Bank Stumbles with Its Currency Peg to the Euro - 21st May 16
SPX Downtrend Underway - 21st May 16
George Osborne Warns of More Affordable UK Housing Market if BrExit Happens - 21st May 16
Gold And Silver 11th Hour: Globalists 10 v People 0 - 21st May 16
David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - 21st May 16
Gold Stocks Following Bull Analogs - 20th May 16
The Gold Chart That Has Central Banks Extremely Worried - 20th May 16
Silver Miners’ Q1’ 2016 Fundamentals - 20th May 16
Stock Market Rally At the End of the Road? - 20th May 16
British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - 20th May 16
NASDAQ 100, FTSE, and British Pound - When Rare Market Data Screams, Listen  - 20th May 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Gold Soars and Global Turmoil and Plans for China Gold Futures Exchange

Commodities / Gold & Silver Jan 03, 2008 - 11:57 AM GMT

By: David_Vaughn

Commodities

Well, according to gold bears gold was supposed to go down.Instead it is going up. Makes no sense, huh? I'm really not a nut to get hung up over the gold price. I merely see the price as a reaction to events happening around us.

Well, another decade is coming soon right around the corner. Seems like the last decade barely got started. Seems like yesterday was 2001 and an entire fresh ten years was before us. And the older we get time seems to go faster and even faster. I remember in 2001 making estimates of where the new decade would take us and where we would be when 2010 came. What has happened these past years?


We have a perpetual war in the Middle East now that we basically are committed to forever. A military presence in Afghanistan and Iraq with only Iran separating the two countries. If you look at a map real well you will see why our government is itching for an excuse to establish a military presence in Iran .

“House Speaker Nancy Pelosi lashed out at Republicans on Thursday, saying they want the Iraq war to drag…” "They like this war. They want this war to continue," Pelosi, D-Calif., told reporters.” “In response, House Minority Leader John Boehner, R-Ohio, said in statement: "Republicans have stood on principle to protect current and future generations of Americans, whether it polled well or not.” MSNBC

With Iran subdued and controlled by the west the United States would have a solid hold on all the oil coming from that region. But Iran stands between all and even has a vast shoreline on the Persian Gulf . Take a look at a map and you will notice this shore line starts at the western end of the Persian Gulf and goes all the way to the very edge of the Arabian Sea .

“AMERICA's elder statesman of finance, Alan Greenspan, has shaken the White House by declaring that the prime motive for the war in Iraq was oil.” “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil…” Times Online

Strategically, Iran must come under western domination for the Middle East and its vast oil reserves to be in the west's hands. As I see it just a matter of time before hostilities erupt there and the United States is forced into another occupation. Iran is a big country and a vast territory but in the end it is militarily insignificant when compared to the might of the United States .

“Tehran today announced, no, Tehran warned that it would fire 11,000 rockets at enemy bases within a minute if the US launched military action against them. The nuclear stand-off between the US and Iran is reaching a critical stage…” “Where does that leave us? Who knows.” “All it takes is the situation in one country to get too big to handle, and you can sure as hell bet that the pressure will reverberate to the surrounding area, one Domino piece toppling after another.” Blogspot.com

So, Iran has come under the microscope. What else has happened? Alan Greenspan is retired and the old magic that made up the Federal Reserve is now gone and past forever in our generation at least. Bernanke will never have the success Alan Greenspan had and he is already undoing all that Greenspan accomplished. A new decade and a new and a weaker Federal Reserve Chairman. Definitely the old magic is gone.

“The bubble has burst and the economic consequences are now coming into view." BBC NEWS

And what else has changed? The housing bubble which began around 2000 finally burst. The housing bubble had been the last magic bullet to keep the economy rolling along. Now that magic bullet is spent. The term “subprime” has taken on a lot of meaning and it is interesting how many derivative funds are directly related to the housing credit market. This bubble is still in the state of deflating and has another summer to go. So its peak might not be really felt until the summer of 2008. I haven't even mentioned yet the subprime housing disaster raising havoc in the home markets and associated elated derivatives.

“The hangover from the lending spree that fed the real estate boom during the first half of this decade keeps getting worse…” MSNBC

And as I write these very words the Pakistani politically popular former Prime Minister was assassinated.

  “The assassination Thursday of Pakistan opposition leader Benazir Bhutto threw the country's election campaign into disarray and sparked a wave of violence across the nuclear-armed nation.” “The assassination deals a stunning blow to liberal political forces trying to combat rising Islamic extremism in Pakistan .” " This assassination is the most serious setback for democracy in Pakistan ," said Rasul Baksh Rais, a political scientist at Lahore 's University of Management Sciences .” MSNBC

A country possessing nuclear weapons now with an unstable government or no government. Pakistan . A country on the eastern border of Afghanistan and formally an ally of the United States is now under threat of civil war. The assassination was committed by Islamic extremists. Now, democracy and civil war threaten a major nuclear power in an Islamic country.

Pakistan 's interior minister blamed al-Qaida and the Taliban for Thursday's assassination…” “Bhutto was slain while campaigning…” Breitbart.com

Did I mention yet a higher oil price at the latter period of this decade? Soon to reach 100 dollars a gallon. Don't even want to mention gold reaching past 800 from a humble 255 an ounce earlier this decade.

“Gold above $830 on weaker dollar, Bhutto's death” “Gold futures rose for a fourth day Thursday and closed above $830 an ounce as a sliding dollar gave the precious metal fresh momentum and as the assassination of former Pakistani prime minister Benazir Bhutto increased geopolitical uncertainties.” MarketWatch.com

Anyway, the point I am driving home is that while we have quietly slept our world has been slowly evolving and changing. And these changes will carry into the next decade 2010 – 2020. Sometimes change occurs so stealthily we do not even notice it occurring around us. And the US dollar is stealthily weakening even as we speak. So, what kind of decade will we be entering in 2010? A messy one for sure. Notice in the chart below the US dollars looong slide downhill?

us dollar index cracks long term support

Trader's Narrative

Did we talk about China ? Just in the past decade China has grown into a major contender for super power status and their appetite for gold is ravenous. Very high gold consumption there.

China approves gold futures trading”“The Shanghai Futures Exchange (SFE), one of China 's major futures trading agencies, is expected to launch gold futures trading soon following regulatory approval.” “Gold was the second new futures product to be introduced to the country's futures market this year.” “Last year, China produced a record 240 tons of gold, a growth of 7.15 percent year-on-year. In the first nine months of this year, it produced 191.456 tons of gold, an increment of 22.175 tons, or 13.1 percent, from the same period last year.” www.chinaview.cn

So let's summarize where we've been and where we are going into 2008 and beyond. So in a nutshell the following is where we have evolved in this past decade:

  • Perpetual war and military occupation in the Middle East .
  • Iran a simmering boiling pot due to spill over soon.
  • Alan Greenspan and his magic have departed for our generation.
  • The housing subprime bubble is slowly suffocating our economy.
  • Pakistan , a major Middle East western ally, is biting the dust.
  • The US dollar continues to sink into oblivion.
  • The gold barometer is finally working properly and rising higher and higher.
  • China is growing along with her insatiable consumption demand for gold.
  • The rise, of course, of Islamic terrorism.
  • The rich are getting richer while the poor are getting poorer.

So, this is where we have been and where we are and where we are yet headed. And do you see a need for gold in this witches brew? Gold will only grow in importance as the new decade slowly prepares for itself. Again, the peace dividend long ago bit the dust and perpetual war waits for us beyond the horizon,

“But whatever process may have been involved, the result has been that the distribution of income and wealth have become much more concentrated during the last several decades. Those in the middle of the income and wealth distribution have lost ground relative to those at the top, despite the absolute increases in their income and wealth.” Falling Behind, Robert H. Frank

It's not too late to invest in gold related equities to take advantage of their wealth preserving attributes. We are living in the last days of cheap resources and commodities. Recognizing these facts Gold Letter, Inc. reviews undervalued gold and other resource stocks under valued and poised to rise in this time of increased demand for resources. Gold will only continue to escalate in value.

Click here to review Gold Letter

By David Vaughn
Gold Letter, Inc.
David4054@charter.net

© Copyright 2007, Gold Letter Inc.

“The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable.”  

The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. © Copyright 2007, Gold Letter Inc.

David Vaughn Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife